Intellectual Property´s archives ↓
It is always of vital importance to register your trademarks in your home country. Therefore, if you are an American company, you should secure federal trademark registrations of your marks. Likewise, if you are a Canadian company, you should obtain Canadian trademark registrations of your marks.
We are often asked, “How do we decide in what other countries we should file our trademarks?” This question is sometimes put more directly: “Do we have to file for our trademark in other countries?”
Although there are exceptions to every rule, the general answer, especially in the healthcare field, is “Yes”. This affirmative response may take many forms. “Yes” may mean you should file in one or two additional countries. “Yes” could also mean you should file applications for your trademark in dozens of countries. It depends on several factors, including:
- Your general business needs and goals;
- The jurisdictions in which you will sell your product(s) or service(s);
- The locations where your product(s) will be manufactured;
- The jurisdictions in which your product is likely to be counterfeited;
- Jurisdictions where you intend or may seek regulatory approval; and
- Jurisdictions in which you may seek partners or licensees for your product(s).
Insofar as each company’s needs are different, it is not practical to provide general advice and recommendations that apply to every company and every circumstance. If you are considering an international filing program, we recommend that you consult with your IP counsel to discuss your company’s specific needs and goals. Although I will not engage in an in-depth of each of these considerations, a quick example may be instructive.
In most European countries, regulatory approval (by the EMA) of a medicinal product is contingent upon a showing that the trademark or trade name is considered available in each of the 27 member countries. One way to establish this availability is by obtaining trademark registrations in each of those jurisdictions. Therefore, as I hinted at in my previous article, trademarks and regulatory approval of trade names are – at the same time – distinct and closely related.
Once you have determined that you should file your trademark internationally, the question becomes how to accomplish this. Again, there are a number of ways to proceed. Each has it benefits and drawbacks.
By Gary Martin
Naming your company, your products, your technology––and let’s not leave out naming your children too––is not only essential, but it’s also fun to do.
That may be why there’s a multitude of articles and blogs that serve up tips on how to create the “perfect” corporate name, or how to conjure up the best product names. You may know of VC’s who birth new corporate identities right at the boardroom table. Although this rash tactic usually leads to a slippery slope, there are some exceptions. One favorite of mine is ALZA, the pioneering pharma and drug delivery company name coined and founded in 1968 by none other than ALejandro ZAffaroni.
But the point of this post is to provide a different slant on naming for start-ups. As I see it, what’s most important to life-science start-ups is not how to name, but how to use naming strategically to your advantage. That is, to get more attention from investors, more interest from investigators, and ultimately more value to your bottom line so your scientific discoveries can become products that help patients and benefit society. Don’t you agree?
It bears mentioning that entrepreneurs usually demure when naming or branding comes up, especially at an early developmental stage. The reason is that they are passionate about their science, so their priorities and budgets are directed to the scientific and product-development side, and not to the commercial and consumer branding side. That’s understandable. There would be no start-up to speak of without the science and technology to deliver the next “biomedical innovation.”
However, the twist is that today every company and every start-up is already consumer facing. Facebook, Twitter and blogs such as this one demonstrate that corporate visibility is on display 24/7. Witness the unfortunate case of Beef Products Inc. (BPI), a U.S. beef products wholesaler who thought they operated under the radar, but who learned otherwise when the sobriquet “pink slime” went viral. Plant closings and layoffs followed, nearly ruining the company. It was as if the knell of the social media axiom was ringing, “if you don’t define yourself, someone else will for you.” Conceivably, this crowd-driven misbranding can also threaten life-science start-ups who fail to define themselves sufficiently.
So, how can naming help start-ups as they progress from test tube to YouTube®? First off, begin naming early before someone else does it for you. Second, think of naming as a tool to help achieve your goals, both scientifically (by branding your science) and commercially. And third, use naming to help define and communicate your key messages and unique differences. Here are three naming approaches that start-ups can use right now:
Name your clinical trials and build your scientific position. The clinical trial phases present excellent opportunities for planting the seed of a novel molecule or for suggesting unique mechanisms or messages. Two recent examples demonstrate: Boehringer Ingelheim’s Phase III clinical trial for the treatment of COPD is named TOviTO™. TOviTO contains the bookend letters “TO” to signal the dual agents being studied, Tiotropium (trade name Spiriva) plus Olodaterol. Roche’s clinical trial study is named NEOSPHERE, an acronym for “Neoadjuvant Study of Pertuzumab and Herceptin in an Early Regimen Evaluation.” The NEO prefix effectively points out the novel NEOadjuvant (pre-surgery) setting for the therapy.
Name your technology and leverage it in your products. ALZA is worth mentioning again for its many innovative drug delivery technology discoveries. And in several instances the delivery technology was leveraged in branded products by incorporating part of the technology name into the brand name: VIADUR® used DUROS® technology; Durogesic® DTrans® is from D-Trans® technology; and Adalat® Oros/XL uses OROS® technology. This naming practice helps start-ups promote technological leadership and product reliability.
Name your products with global brand names. Brand names function as free sound bites for your products (even before marketing approval). They can be crafted to encourage a patient message, such as Amgen’s ENBREL® was from the message “ENaBling RELief”, or names can be shaped to signal a scientific link, like Genentech’s PERJETA® which shares the PER prefix with it’s INN, pertuzumab. These brand names are assets that also convey credibility, thoroughness, and commercial progress for their owners.
Life science start-ups are passionate about their scientific discoveries. By taking a proactive strategic approach to naming, they can better appeal to investors, attract potential partners and communicate with the healthcare community so that their scientific dreams can advance to commercial reality.
Your thoughts and stories are welcomed in the comments section below.
Gary Martin is president of Gary Martin Group LLC, a boutique biopharma naming & branding firm in the SF Bay Area. Looking for guidance or additional information? Please email Gary or visit his firm’s web site here.
Many early-stage biotechs get started by licensing some core intellectual property from a government or university Office of Technology Licensing (OTL). At first glance, this seems straightforward. But there are a number of things that go wrong too frequently and, with good patent attorneys often charging $400 – 800/hour, IP problems are very expensive to fix! Below are some of the types of problems to be on the lookout for during your university licensing negotiations.
1. Academic patents are often poorly constructed
Don’t blame your attorney just yet – think about how a tech transfer office operates. There are a number of systemic issues that lead to a very a different quality of patents than you would find in industry. First, an OTL at a major university files hundreds, perhaps over a thousand patents each year. With this much volume, it’s extremely difficult for the office to adequately monitor the quality of each application. Second, patent prosecution is expensive, so universities are trying hard to keep billable hours down. Being cost-conscious shifts the onus to the inventors to make sure that the claims are well-constructed, well-supported with examples and that no prior art has been overlooked. Third, patents aren’t as much of a currency in academia as in industry, so they often don’t get the time or effort necessary to fully support the invention claimed. The takeaway: if you’re working on a patent with your OTL and hope to eventually license it, understand that it will require a major investment of your time to do it right – double-check everything, take nothing for granted. If the patent’s already been filed and you’re negotiating a license, make sure the IP is high quality before making a substantial investment.
2. There is a high likelihood of prior art
‘Prior art’ is the bane of any patent. If an examiner finds it, even if it was disclosed by the same inventor that filed the patent, your claim gets rejected. Prior art can show up anywhere – a publication, a thesis, a conference abstract, or a presentation. Sometimes it turns up years later after a company has already spent hundreds of thousands of dollars on the IP. Once a patent has been filed it’s harder to work around prior art because you aren’t allowed to add new matter.
Companies are very secretive about their work to avoid these types of disclosures but academic labs are just the opposite – they’re (rightfully!) built upon open sharing of results and collaboration. So one has to be much more careful of prior art while patenting an academic invention, and when deciding whether or not to license it. Caveat emptor.
3. The license may not offer international protection
In today’s environment having a patent in a single country just doesn’t cut it. Potential buyers and partners expect broad international coverage to maximize the revenue potential of their investments. OTLs do their best to cater to this demand but are held back by legal and financial constraints. First, some countries have grace periods for disclosure by the inventor whereas others do not. In the US if a professor disclosed an invention he or she would have a 12-month grace period to file in the US but the disclosure would constitute prior art in Europe. This happens a lot. Second, international protection – especially the so-called ‘national phase’ – is extremely expensive. The patent is translated into many different languages and filed at offices around the world. The cost? Often well over $100,000 – so universities have to be extremely selective about which patents they take this far. To make matters worse, there is a time limit for entering the national phase – in most countries it’s ~30 months from the priority date, so the IP hasn’t generated serious interest from a potential licensee by this time, it won’t get prosecuted internationally.
4. The university might object to a license due to conflict of interest
Lets say you’ve carefully analyzed the IP and you’re confident that it really is worth licensing – what are the factors to be aware of while you’re working out a deal? One is conflict of interest (COI). Sensitivity to COI will vary substantially from one institution to another, but in general universities are hesitant to license inventions back to the inventors because they’re worried the licensee will use university resources for financial gain. To avoid concerns over COI, at a minimum it’s best to have someone not affiliated with the university negotiate the license.
5. The terms may be onerous
Tech transfer offices don’t operate with pure altruism around the introduction of new technologies to the market place – they’re also out to recoup their patent costs and, in a perfect world, to make some profit. The term sheet for a typical license agreement includes a mix of upfront payments, annual maintenance fees, milestone payments, equity, royalties, etc. Often these terms can be so onerous as to discourage investors from financing your company or, worse, scare away a prospective buyer. The best way to combat above-market terms is to provide examples of similar deals with more startup-friendly provisions. Other entrepreneurs who have gone through the process can provide a data point. Investors may have an even better sense of what a fair term sheet looks like since they go through these negotiations routinely.
So what can entrepreneurs do to avoid these problems in tech transfer?
1. Get involved early – the earlier you get involved the more you’ll be able to shape the IP that the office generates. See if your OTL will let you work directly with the patent attorney to make sure that the patent is well-constructed and no prior art is overlooked.
2. Be proactive – again, if you want a strong patent, let tech transfer know that you’re interested in a license. Tell them that you’re only interested if they use a specific attorney (who you know is good) and only if the patent is prosecuted internationally.
3. Ask for help – there’s no reason to make the same mistakes that others have made before. Use your network – reach out to attorneys, entrepreneurs and investors for help.
In the healthcare field, companies often focus on patents rights, but neglect to appreciate the importance of their trademarks. However, trademark rights are equally important for a number of reasons.
At a most basic level, trademarks are important for the bedrock rights they provide. In the United States, a trademark registration provides prima facie exclusive rights to use the registered trademark throughout the United States. That is to say that, once registered, there is a presumption that the owner possesses exclusive rights in all 50 states plus U.S. territories and protectorates. This, in and of itself, is a valuable benefit.
The United States is one of a few countries that recognize so-called common law rights. This means that use of a mark in commerce, even without a registration, may confer trademark rights dating back to the date on which the mark was first used. However, common law rights do not grant the same presumption of rights throughout the United States. If a company wishes to rely on its common law rights, it must nonetheless prove its rights in each proceeding, and may not rely on the presumption of rights granted by a federal registration. In order to rely on common law rights, a company must ensure it possesses a paper trail that establishes its rights including the date of first use, the nature of use, sample packaging and advertising, advertising expenditures, sales figures, etc.
The situation in Canada is similar. A Canadian trademark registration provides presumptive trademark rights throughout the 10 provinces and three territories.
In addition to granting presumptive rights, a federal trademark registration also helps establish the date on which a company first obtained rights to its trademark. If a trademark application is filed before use of the mark begins, U.S. trademark law – the Lanham Act – affords an applicant constructive rights in its trademark as of the filing date of the trademark application. Thus, a company may acquire constructive rights even before it begins using its trademark. However, the constructive date of first use remains effective only if a certificate of registration ultimately issues. If a mark is based on actual use in commerce, an applicant secures rights as of the claimed date of first use.
It is important to note, however, except in certain situations pursuant to international treaties, the U.S. Patent & Trademark Office will not issue a certificate of registration until an applicant proves that it is using its mark in commerce. The rationale behind this requirement is that, in the U.S., the essence of a trademark is that it is being used by its owner to distinguish its products (or services) from those of others. Accordingly, without use in commerce, there is no trademark because it is not functioning to distinguish any product or service. Without a product on the market, there can be no trademark. Additionally, it helps discourage the practice of creating a bank of trademarks that may or may not ever be used.
Two other countries also require use of a mark before a certificate of registration will issue. Notably, these countries are Canada and the Philippines. These are the exception.
Most countries do not require use before a trademark certificate of registration will issue. Rather, trademark rights are created by registration of the mark. Use is not required to obtain a registration. However, if a mark is not used for a period of time – usually five years – third parties may ask the relevant trademark office to cancel the registration for non-use. Therefore, while most countries do have some form of use requirement, most do not require use to obtain a certificate of registration.
Finally, the majority of countries do not recognize common law rights. Therefore, in most countries, trademark registrations are important.
The advantages of securing trademark registration include:
- Presumptive nationwide rights;
- Visible deterrent and constructive notice to potential infringers by use of the ® symbol;
- Citation by the Trademark Office in applications to register potentially confusingly similar trademarks; and
- Ability to grant a valid license to another party to use the trademark.
Aside from the “legal” benefits of trademark registration, there are a number of less obvious, but important, reasons to secure trademark registrations.
A trademark registration, in many countries, gives third parties constructive notice of a company’s rights in its trademark. As a practical example, if a third party is looking to adopt a new trademark for a new product, it will usually conduct a trademark search to ensure the mark is “available”. If a company’s trademark is disclosed in such a search – especially if the registration is based on actual use – this can be sufficient information to persuade the third party to forego its similar mark in favor of another mark that is less similar. Thus, a trademark registration may help discourage third parties from moving forward with a similar mark, and avoid the need to take future enforcement action.
In a similar way, registration of a trademark may help avoid FDA (or other regulatory agencies such as Health Canada) approval issues. If your company owns a trademark registration, but has not yet sought FDA approval of the “trade name,” and another company is looking to file an NDA, the disclosure of your trademark in a trademark search may be sufficient to dissuade the third party from submitting its similar mark to the FDA. Of course, the converse may also be true: That same third party may rush to file its name with the FDA (even without a trademark application) before you do because the FDA places essentially no weight on the status of trademarks at the U.S. Patent & Trademark Office. Once approved by the FDA, it is far more difficult, if not impossible, to convince the FDA that the name should not have been approved. Practically, this could require you to select another trademark – even though you own a certificate of registration for your trademark.
It may be prudent to develop a strategy whereby your company creates a trademark protection program that parallels regulatory approval. In most cases, the regulatory approval process of a new product or technology takes more time than the trademark registration process. Notwithstanding, in order to minimize the risk of spending money for registration of a trademark that may ultimately be rejected by the regulatory agency, the regulatory and trademark filing processes should track each other in a way that makes sense with your company’s specific timeline.
Depending on the company’s goals, trademark registration serves lesser known benefits.
If you are looking to license your product or technology to a third party, the existence of a trademark registration adds value to the product or technology to be licensed. It completes the process.
Companies that may be interested in licensing your product will find some assurance in the fact that a trademark has been selected and protected by a registration. Possession of a certificate of registration means that implementation of the licensee can move forward quickly with the marketing and sale of the product with the knowledge that you have selected and protected the product’s trademark, and that the relevant trademark office considers the mark available because it has issued a certificate of registration. In other words, it may act on the licensing agreement quickly without waiting for you to select, file and register the trademark that is the subject of the license.
If a start-up company is seeking funding – from a bank or a venture capital firm – the ownership of trademark rights may demonstrate to the potential funding institution that the company has assets that can be used as collateral or simply that the company is proceeding in a knowledgeable and sophisticated way. A certificate of registration establishes that the company is developing its business in a methodical and industry-appropriate manner. Likewise, valid trademarks and trademark registrations may be proffered as security interests for loans.
Acquisition or Merger
If a company’s goal is to merge with another company or to be acquired by another company, possession of certificates of registration is valuable. As discussed above in the context of obtaining funding, ownership of trademark registrations demonstrates to potential acquirers that the IP portfolio is being properly protected. Additionally, possession of trademark registrations eases the due diligence process because certificates of registration establish to potential acquirers that the company possesses presumptive nationwide (or international) rights in its trademarks. This knowledge provides some level of assurance that the company’s trademark rights are valid and less likely to be challenged by third parties.
Additionally, trademark registrations have value. Although IP rights are considered “intangible” rights, they nonetheless tangibly contribute to your company’s overall value. Therefore, a strong and well-protected trademark portfolio may increase the valuation of your company. It helps to think of it as follows: If you are looking to sell your home, painting rooms, making minor repairs and sprucing up the curb appeal that might cost $10,000 may increase the market value of your home by $50,000. Trademarks can function in the same way. The relatively low registration fees can increase your company’s value by many times more the investment. The benefits are two-fold: first, a robust portfolio is likely to bring in more people to look at your company. Second, it increases the market value of your company.
Sale of Product
The same benefits apply if a company simply wants to sell a discrete product or technology to another company. It provides some assurance that, in addition to the relevant patent(s), the trademarks enjoy some level protection and, at the very least, the national trademark office considers the marks to be the property of the company.
Also, owning valid trademark registrations of the marks for the product to be sold can increase the value of the product and mark to the potential purchaser.
International Filing Benefits
Finally, if a company initiates sales locally (or nationally), possession of a trademark registration in one’s home country can simplify the process of protecting the mark internationally. Ownership of a trademark registration in one’s home country can provide a basis for filing future applications for the same mark in other countries. In some situations, it can also reduce the costs associates with protecting one’s mark internationally. These benefits will be discussed in future articles.
There are a number of benefits to seeking registration of one’s trademarks as early as possible. In addition to providing national trademark protection, certificates of registration may aid in obtaining additional investment and funding, selling products to third parties and obtaining future registrations throughout the world.
Don’t wait to register your trademarks. Trademarks are important to your company’s IP portfolio and the value of your business. Don’t forget your trademarks!
Two reports published by the World Intellectual Property Office (WIPO) demonstrate that patent filing is back on the rise and is of increasing value to stakeholders. This is interesting news for biotech startups and other companies who’s value is often determined by their cutting edge intellectual property.
Each year, WIPO publishes an extensive report detailing patent filing trends based on a survey of more than 80 countries to collect currently unpublished data. In December 2011, WIPO published their latest data on macro-level trends observed in 2010. This year’s report entitled “World Intellectual Property Indicators” shows that patent flings have increased 7% worldwide after seeing a 4% decline in 2009. Filings in China and the US account for 4/5 of the growth, consistent with the rapid change in Chinese activity in recent years. While PCT applications (International patent applications) declined for the first time in 2009 by 4.8%, there was a 5.7% increase in 2010. This increase is driven by filings from China, Japan and the Republic of Korea, collectively accounting for 94% of growth.
In a complementing report “The Changing Face of Innovation” WIPO takes a broader perspective to discuss the role of IP in global innovation and economic development. Here WIPO explores the relationships between IP and the translation and accessibility of knowledge, as a measure of firm and international collaboration, and its increasing value to firms. Of note, WIPO shows that cross border licensing trade has increased from 28 billion of international licensing and royalty fees in 1990 to 180 billion in 2009.
These reports are filled with valuable and interesting data on patent filing trends cut geographically, by residency and by very high level technology segments and are a fantastic resource for quick access to high level data. This year’s report on “World Intellectual Property Indicators” also includes a special section that examines some of the underlying characteristics to the “surge” in patent activity seen between 1995 and 2008 such as influence of geography, R&D spend and complexity of technology.
These trends demonstrate the increasing value placed on intellectual property and the significant amount of monies spent. For biotechnology startups, revenues are often a figment of projections and company value dominated by the quality of the intellectual property. The increasing global adoption of IP bodes well for biotech startups, particularly those that are developing innovative technologies and products.
The full report segmented into chapters, data tables and the special report can be found at WIPO: